Economic Implications of foreign exchange rationing in Ethiopia

This paper examines macro-economic developments in Ethiopia between 2004/05 and 2008/09, focusing on the external accounts and the real exchange rate. Simulations using a Computable General Equilibrium (CGE) model of Ethiopia’s economy show that, compared to a policy of foreign exchange rationing, a policy of real exchange rate depreciation and no rationing improves economic efficiency and welfare of all households except those who receive the rents (excess profits) arising from rationing.

Author: 
Dorosh, Paul
Robinson, Sherman
Ahmed, Hashim
Published date: 
2009
Publisher: 
International Food Policy Research Institute (IFPRI)
Series number: 
3
PDF file: 
application/pdf iconessppb03.pdf(662.3KB)